Microgrids – The Next Evolution of the Grid

02 Nov Microgrids – The Next Evolution of the Grid

Microgrids are on the rise. A microgrid is a grouping of distributed energy sources with control capabilities and can work with the grid or operate autonomously as dictated by demand. It is essentially a smaller version of the grid with several advantages. These advantages include the capability to operate when the main grid is down, a provision of stability in strengthening the grid by reducing grid disruptions, and an increase in efficiency due to the use of local energy sources which mitigate energy losses in the processes of transmission and distribution.

Ironically, the utility grid originated as a microgrid. In the early days, they were used primarily to serve remote areas where there was significant demand for power, but not enough to offset the costs associated with establishing transmission lines from distant power plants. The modern-day utility grid has not proven infallible to power outages, natural disasters, solar storms, and terrorist attacks. However, microgrids can provide a safeguard against failures and disturbances. Microgrids can operate autonomously, which means should the grid fail, the microgrid can continue operating through island operation mode. Islanding is when electric loads are separated from the central utility grid and run independently on local distributed energy resources (DER). This ability of cellular control, where individual cells would be capable of operating independently even with grid failure is a microgrid’s ace.

Benefits of Microgrids

Microgrids use localized renewable energy sources for power generation, thus making them more environmentally friendly. They are able to work in conjunction with the utility grid and address specific user needs and demands. They are mostly automated with smart technology and intelligent controls that can anticipate problems and failures and reconfigure itself to account for them. Automation also allows for improved service reliability, an attribute that data centric companies are looking for and the presence of which could provide an additional revenue stream to that community. Corporations and organizations such as data centers, hospitals, military bases, and research labs cannot afford even a momentary power blip.

The main benefits of microgrids are reliability, efficiency, security, and sustainability. The ability of microgrids to connect and disconnect from the grid will allow them to provide a reliable source of power should the grid fail. Microgrids are efficient because the use of local sources of renewable energy would reduce energy losses in transmission and distribution. They enable us to be more energy secure because it allows us to rely less on foreign fossil fuels, which are susceptible to market fluctuations and supply disruptions. All of this can lead us to a path of sustainability.

Some key drivers to microgrid projects include electrification needs in remote areas and developing countries, grid security, grid optimization, demand for lower cost energy alternatives, and the use of more environmentally friendly energy sources. There are state requirements that renewables have to be utilized by a certain deadline. The implementation of microgrids can help close the gap.

Microgrids can counter the effects of climate change through the use of renewable energy and storage, thereby reducing carbon emissions and making them much more energy efficient. Climate change can cause weather fluctuations, manifesting in droughts, heat waves, wildfires, etc. All of these natural disasters can negatively impact the grid by inhibiting its ability to operate efficiently and effectively. It could also pose a security risk as vulnerabilities would be exposed, which could lead to serious repercussions.

Microgrids can serve remote communities. They empower consumers by enabling them to generate their own power to meet their individual needs. There is a flexibility to use a wider range of renewable energy sources such as solar and wind. Microgrids streamline local peak power loads and resource requirements through the use of local energy sources, thus increasing efficiency of the system. Local generation is not only a cost benefit, but also environmental as it does not have to travel far distances to reach consumers, thereby reducing carbon emissions.

Microgrid operations can cause wide-reaching impacts with environmental benefits such as the reduction of harmful emissions like greenhouse gases and other pollutants, the scaling down of the reliance on fossil fuels, and the promotion of economic growth through local employment creation. As our reliance on finite fossil fuels cannot continue much more into the future, our goal to wean off them to become sustainable lies in renewable energy. Microgrids can provide that solution.

Microgrid Challenges

Microgrids face several challenges in widespread implementation. Technology integration, financing, and legal and regulatory statutes pose the main barriers to overcome for widespread microgrid application use.

The integration of microgrids into existing legacy systems may be challenging due to the outdated equipment pairing with newer technology. It may require specialized equipment, which can be costly.

Financing for microgrids is another hurdle to overcome, as it requires an entity to be responsible for the upfront costs of implementation and then the maintenance of the system. Typically, a developer or investor would take ownership of setting up the system. However, steps must be in place in order to finance the project through completion.

There are also legal and regulatory issues that have to be navigated by anyone proposing to set up a microgrid. Laws and regulations regarding microgrids have not been developed clearly and there is a lot of uncertainty surrounding them. Since the regulatory landscape concerning microgrids is still relatively undetermined, developers and investors must tread carefully.

Community Microgrids

Solar is known to be good for the environment. It would make sense to take advantage of a free, clean, and renewable source of energy to power our everyday life and reduce our electricity bills in the process. If a community was to invest in solar as a unit, the initial up-front cost of the panels could be cheaper due to the volume being purchased. Solar panels are a long-term investment, but the return can be far greater and wider reaching.

Some microgrids were born out of necessity. Severe weather conditions such as hurricanes caused massive blackouts that incapacitated whole communities. To prevent such disasters from happening again, many communities have turned to microgrids as an answer. Local power ensures local responsiveness, especially in times of crises.

Besides using the power generated for themselves, communities can also sell any excess energy back to the grid. That money can then be used to fund areas of the community that need updating like playgrounds or provide maintenance of common areas like parks. The value of any electricity generated stays within the community. Communities would be able to be self-sufficient.

A microgrid could help foster a closer-knit community. People would have common goals and interests in working together to better the community as they live together. Sustainability is a key motivator for building a microgrid in communities. More local power being produced means less importing from faraway power plants and fewer carbon emissions being produced.

The Tribal Effect

Most Native American homes are spread out in isolated areas. The remoteness of reservations means little or no accessibility to the utility grids. No electricity can be isolating and limit the communities’ modernization with the rest of the world. Reservations typically serve the needs of a whole community and would be the perfect model for microgrids. The potential for the use of renewable energy for reservations is very great, as the land represents about 2% of the whole U.S. land base.

Strong industry partnerships will allow tribes to make energy projects a reality. They would be able to provide technical expertise to the project. Blue Lake Rancheria, a Native American reservation in northern California, is partnering with Siemens to build a community microgrid. It will be partially funded through a $5 million grant by the California Energy Commission’s Electric Program Investment Charge (EPIC) program. The system will be powered by a 0.5 MW solar array, a 950-kWh battery storage system, a biomass fuel cell system, and diesel generators. It is projected to reduce carbon emissions by 150 tons per year.

About 30 miles north of Las Vegas, the Moapa Band of Paiutes built a hybrid microgrid project, powered by a 250-megawatt soar photovoltaic project. This impressive feat demonstrated the feasibility of putting rural land to power remote tribal communities with clean and renewable energy.

Alaskan Native communities could also prove to be a good fit for microgrids. Due to rural Alaska’s isolation, it is heavily dependent on fossil fuels for energy. Diesel is generally brought in by barge or airplane, which are quite costly. Microgrids would lessen that expensive dependency on fossil fuels and pave a path to sustainability.

Hawaiian Natives would also benefit from microgrids. The price of electricity there is about three times the national average due in part to the costly import of foreign diesel. Microgrids will allow the islands to become sustainable and achieve energy independence. Hawaii has a goal to be 100 percent solar by the year 2045.

Another benefit to building microgrids for Native communities is the job creation that ensues. Locals will be able to participate in the building and retention of the microgrids. They will be able to get a first-hand perspective on what it is like to take part in the process of building a system that will improve and enhance the lives of everyone involved in that locality. It will foster a closer-knit community. The establishment of a microgrid could also encourage other renewable energy projects.

A Look Ahead

In the beginning, utilities looked upon microgrids as a threat to their status quo. They felt that their business model was being disrupted. Utilities have usually been seen as an impediment to renewable energy paths. Now, they are beginning to realize the importance that renewable energy will play in the future and that microgrids will become an integral part of that future as well.

Utilities need to reevaluate the industry and determine where improvements can be made. Past performances have proven that the grid is not infallible to failures. They need to discern what role microgrids will play going forward. Some utilities are looking at microgrids as a complement to their systems, rather than as a competing entity.

There are really no negative effects of implementing microgrids. They are better positioned to meet the needs of the future. Localization of generators, solar cells, and other related energy generation equipment allows for management of energy efficiently and effectively, whereas the reliance on power companies to offer the same benefits would be much costlier and time consuming.

Consumers want choice in how their energy is produced. They want to be able to exercise more control and be able to customize to fit their unique needs. Microgrids empower people, as they no longer have to be passive recipients of energy. With the utility grid, there is a lack of choice. One failure and everyone suffers. The value of a microgrid to the host utility is that it is designed, operated and controlled to free capacity on the grid, as well as provide a backup resource. It is only a matter of disrupting the archaic notion of current methods for better technology and processes to be installed and implemented.

A peer-to-peer electricity system is on the horizon. This will hopefully release the iron grip that utilities have long held. It is up to the utilities to decide whether they want to continue with an antiquated business model or innovate by embracing the new dynamic.